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Tiger Beer Heineken’s formula to a profitable 2017?

According to latest reports on Bloomberg, Heineken is forcasting an increase in profit in 2017 with the help of Tiger Beer sales in Asian countries. Net profit is forcasted at €2,098 million, up 8.5% organically and organic revenue up 4.8%, according to the company’s financials.

Currently Vietnam forms one of the Heineken’s largest markets and according to Bloomberg in Vietnam higher middle-class incomes are boosting consumption. Cambodia and Indonesia are compensating the slow shipments in Europe, America and Africa, said the article.

In its earnings forecast on Nasdaq, the company reported that it has experienced the fastest earnings growth in the last seven years with 13% driven by growth in Asian revenue. In 2016 entered new countries including Ivory Coast and the Philippines, and expanded production capacity in China, Vietnam, Ethiopia and Cambodia.

Jean-François van Boxmeer, CEO, chairman of the executive board of Heineken attributed this growth to the diversified footprint, which helped them gain a competitive advantage, despite more challenging economic conditions in some developing markets and significant currency pressures.

“Performance in key European markets was good and results in Vietnam and Mexico were strong. In Africa, Middle East and Eastern Europe market conditions remained tough, most notably in Nigeria, DRC and Russia. Excluding major unforeseen macro economic and political developments as well as the impact of the proposed acquisitions in Brazil and in the UK, we expect continued margin expansion in 2017 in line with our previous guidance,” he added.

The report also stated that in September 2016 Heineken started a new global partnership with Formula 1 which allowed the company to reach new consumers. Heineken first inked an international deal with Formula One Management (FOM) in June last year which saw the global beer brand become a sponsor for Formula 1 globally. The two have inked a deal which is set to run until 2022, with an option to opt out by 2020.

As part of the global deal, from the 2017 F1 season onwards, Heineken will also be known as F1 event title partner of three Formula 1 GPs. It will have a significant presence at several additional F1 events chosen by Heineken and Formula One Management. Through the platform it is also advocating responsible consumption by investing in its “When you drive, never drink” campaign through the new Formula 1.

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